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Of course, the firm's clients are not only very wealthy but very busy. Don't they mind getting pulled into such time-consuming investing projects? "Not at all," says Bernie Marcus, the retired founder of Home Depot. "So many of the financial people today sit in front of their computers and they only know the numbers. But here, these partners at CMS go to people who have been in the kind of businesses they're considering. You can't buy that kind of information. And all these clients share freely with them because they know that. These guys are smart enough to listen to the people who have become successful. This is how they perpetuate their success."

These are not venture capitalists looking to seed start-ups. CMS invests in more mature companies that are up and running and looking to grow, and the firm always looks for a measure of control in the businesses it pursues.

Two recent deals typify the process. Three years ago, CMS teamed up with KRG Capital, a Denver private-equity firm, in purchasing two Pennsylvania-based companies: TransCore Holdings and UTI Medical Devices. TransCore is a leading provider of automated toll-collection systems like the ones used by EZPass. "It's a fascinating business, a great management team," Landman concluded after a period of due diligence. What really charmed him, however, was TransCore's strategic position in a field that promised terrific growth--as well as the belief that the fledgling company would benefit from his firm's involvement. CMS quickly matched TransCore with a new accounting firm and a new law firm that could handle the intricate state and government contracts the company depends upon. "We went on the company board," Landman says. "We're very involved with the company day to day."

Landman is similarly optimistic about UTI, which engineers, manufactures, and assembles precision medical equipment. He explains that KRG was in the process of buying and integrating several small medical-device companies when some CMS clients told him about UTI. Seeing a nice fit, he brought the idea to KRG. Landman believes that the resulting deal (the new integrated device firm that has kept the UTI name) has enormous potential, and as usual CMS and its clients have been tapped for expertise, advice, and guidance. This has meant visiting UTI's production facilities at various locations around the country and helping the company reconfigure its executive ranks. Landman, for instance, has helped recruit and interview CEO and CFO candidates.

One of the first investments that I made with them went bad," says Donald Crawford, a broadcast entrepreneur who owns a chain of 28 radio stations. "And on their own initiative they made good on any losses we sustained."

The origins of CMS go back to the mid-1960s, when Mark Solomon was selling sophisticated high-end life insurance policies to doctors and entrepreneurs in the Philadelphia area. Solomon discovered that he didn't like doing business with doctors, but that he loved doing business with entrepreneurs. By the time he formed CMS (originally Capital Management Systems) in the late 1960s and brought Paul Silberberg onboard a few years later, the firm had honed its expertise in peddling insurance and financial- and estate-planning advice. "The entrepreneur part of CMS, like most things in life, was an accident," Solomon says. "Over time you gravitate toward where you feel most comfortable." As Silberberg explains, it might be easier and less time-consuming to represent nonentrepreneurs--people who don't ask so many questions about potential investments. But it would be more difficult on the back end, especially since CMS's funds are illiquid and often put investors' money out of reach for as long as 10 years. "In private investments you need time to work things out," says Silberberg, "and less sophisticated clients don't give you time. We have yet to buy a business that hasn't run into a problem. It's just a question of how big and when. And our clients give us time to fix those things."

Or at least they do now. In the early 1980s, when CMS first started investing alongside its clients in real estate and individual businesses, the learning curve was steep. While some early residential real estate deals turned out well, a commercial office building endeavor blew up. Then came a disastrous investment in a Chuck E. Cheese pizza franchise in which CMS lost its clients' money along with its own. A wipeout. The loss undercut CMS's most fundamental covenant with its clients--that it would never endanger principal. In some ways, however, the debacle proved a turning point for the firm. The partners decided that CMS would immediately come clean to clients about just how bad things had gone and transfer to those same clients the firm's own shares in a profitable buyout fund.

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